The PR (Prime/Retirement) chart is now my starting point. My desired retirement age is 65 from finance or IT profession and 75 in a later, 2nd-tier profession, perhaps teaching or a lower-level IT job. I really like working till an old age but IT professionals are not like doctors who can work till 70. I will work in IT for as long as I could, and then switch to lower gear

• Chance of some disaster and loss of subsequent income during prime years (before 65)? See post on loss of income.
• Chance of late stage CI during prime years? High leverage, low probability of disaster. I don’t know the meaning of late-stage — does it mean soon to die? Better ask a doctor.

The relationship between leverage, Pr(disaster hit) and Pr(payout) is central to my thinking. We could assume

probability of disaster is roughly == probability of payout [1].

Insurance companies give you high leverage when Pr(payout) is low, i.e. premium is cheap.
* If Pr(hit) is too low, then I’m paying for a non-issue. (This is my view of late stage till 65)
* If Pr(payout) is too high then too expensive

My goal is to address high Pr(hit) at reasonable cost. IMO,

Pr(payout Early stage CI till 65) > Pr(payout Late stage CI till 75) but not sure about Prudential… I guess with Prudential, for the same SA,

P(payout early stage CI till 65) == P(payout Late stage CI till 80)

So I should buy less of the expensive.

[1] Watch out for the trap of high Pr(hit) but low Pr(payout) in the Critical illness plans. Too much fine prints to read…:( Eg:  You may have a diagnosis by age 65 but not qualified for payout:(

• (See post on loss of income). If I were to protect against this H U G E  loss of income in [2], I might need a 25Y term plan of Early stage CI, not late stage, not life, not TPD. However, having early stage diagnosis doesn’t mean unable to work or loss of subsequent income. Also, Early stage is expensive, so I will consider a small sum like 50k for about $900/yr by Axa. Total premium would be about 40% of the $50k, so it’s not really “cheap insurance”.

• Probably should get a 35Y late stage CI — Hopefully (but not by Pru!) Cheaper than early stage CI and cheaper than whole-life late stage CI. I think it’s about $1600/yr for $150k payout

• In addition, I might convert 50k of my existing Axa plan (with late stage CI) to whole life, and possibly terminate the rest.
• No-CI till 65 gives highest leverage.

My total budget for my insurance? Up to $2000/yr.

My other medical protections (all reimbursement types) include:
+ company hospitalization insurance? Will lapse when I have to quit
+ Aviva Myshield + riders? Will cover major hospital bills 100%
+ in the US I will buy some standard reimbursement insurance that covers hospital, outpatient etc